Whitehaven Coal said on Wednesday its first-quarter production dropped by almost a fourth as severe floods in New South Wales locked it out of its key Maules Creek mine for a week, sending the Australian miner's shares down more than 7%.
Severe wet weather including floods in Australia's most populous state, New South Wales, disrupted mining operations as the country suffered for a third straight year from the La Nina induced adverse weather.
"Operations slowed further as a result of labour shortages, absenteeism and seasonal impacts relating to heavy fog and increased noise-related delays in the winter months," the country's largest independent coal miner said.
Managed run-of-mine coal production was 4 Mt for the quarter ended Sept. 30, compared with 5.2 Mt a year ago and brokerage Barrenjoey's estimate of 5 Mt. Run-of-mine refers to ungraded coal, before it is processed.
Whitehaven said its annual output at Maules Creek was on track to be at the lower end of its 11.7 million tonnes to 12.6 million tonnes (Mt) forecast.
Its shares fell as much as 7.1% to A$9.67, underperforming the broader market, which rose 0.4%. Rival New Hope also lost almost 7%, while Coronado Global gave up nearly 3%.
The company maintained its fiscal 2023 output and cost forecast, however, as it bet its Narrabri mine would meet or exceed its production estimate, marking a turnaround after more than a year of geological and maintenance challenges.
Whitehaven was also bullish in its view of coal prices for fiscal 2023 and beyond after it achieved a record average price of A$581 per tonne in the September quarter, up from A$189 per tonne a year earlier.
"Looking locally, a number of weather events impacted coal producers during the September quarter, which together with the forecasted La Niña weather patterns, has further bolstered support for strong coal prices out of East Coast Australia," Whitehaven said.
